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Insider - Notes from a small island

Being ranked fifth in the government is an impressive position for any accountant, even if Linda Clemett only manages a budget of £20m for the island of St Helena in the South Atlantic. But dragging its idiosyncratic finances into the 20th century is no small feat.

CIPFA accountant Linda Clemett was a freelance consultant working for (among others) the Home Office in Croydon, when she spotted the job advert in the back pages of Accountancy Age for a financial analyst and planning accountant for the Island of St Helena in the South Atlantic.

Just months down the line, she has swapped one of south London’s less salubrious neighbourhoods for her very own government house in one of the remotest spots on earth. She has her own flagpole (complete with Union Jack) and a cannon pointing out to sea to stop tax dodgers leaving the island.

St Helena – sometimes described as ‘one big volcanic pudding’ – is 1,200 miles from Angola, the nearest mainland, and around 1,800 miles from Brazil, in the middle of the South Atlantic. The only commercial route to St Helena is to fly to Cape Town in South Africa, and from there it is the small matter of taking a 1,500-mile boat trip, which can last up to seven days.

Officially, it’s a British Dependent Territory but in reality it is a colony, complete with a huge lumbering bureaucracy of expats and ‘Saints’ fussing over the lives of the island’s 3,500 inhabitants. Its main claim to fame is that Napoleon was incarcerated in St Helena and died there after he was defeated at the Battle of Waterloo.

These days, the main battle facing St Helena is attracting the right calibre of people to take on the challenges of moving the island closer to the 21st century.

Fortunately 47-year-old Clemett is no stranger to remote islands and certainly has a taste for foreign adventure. She previously spent two years in the Maldives working for the finance minister on Male, where 80,000 people are squeezed onto a two and half square kilometre island.

Clemett trained at the National Audit Office and worked as a consultant for Grant Thornton, before becoming financial director of the Centre Point charity for the homeless in London. This was followed by a spell as the resources director of the Refugee Council. She gave this up to become a self-employed consultant working for clients including the Asylum Support Service at the Home Office.

She was, therefore, well steeped in public sector work as she stepped ashore at St Helena’s quaint capital town of Jamestown. A new financial secretary had just been appointed and Linda was expecting to work under him. But following a wrangle over remuneration, the favoured candidate withdrew and she was asked if she would like the post at a local salary – way below the going expat rate.

She admits part of the job’s appeal was the opportunity to become number five in the island’s hierarchy, just below the governor, bishop, chief executive and speaker, but above the attorney general. ‘People called me Ma’am and I was offered a government house at the top of Jacob’s Ladder, a 699 step climb from my office in The Castle,’ she says.

Clemett’s budget is under £20m – less than a third of the sum she handled at the Refugee Council – but her remit is certainly broad. ‘Apart from being responsible for all of the island’s budgeting and financial management, it’s my job to negotiate St Helena’s aid package from the Department for International Development, look after the financial management of the RMS St Helena, as well as being commissioner of income tax, currency commissioner and collector of customs.’

The island’s government raises £5.8m annually from wharfage, £1m from direct taxes and £2.1m in indirect taxes via customs duty. There is no VAT.

St Helena is governed by colonial regulations, which have changed very little since the 1940s. Today, there’s a reasonably modern computer system and a perfectly good email system run by Cable & Wireless, but Clemett admits she is still faced with huge numbers of files and piles of paper. ‘Everybody writes things down on bits of paper – even in the local stores,’ she says. ‘It’s a habit that seems hard to cure.’

The job is not without its challenges – and controlling the island’s finances is pretty high on the list. ‘There’s an increasingly elderly population and we have unpredictable medical expenditure, as all serious cases have to be evacuated to South Africa for treatment,’ Clemett explains.

The tax basis is shrinking as the population declines – only 35 babies were born last year and many Saints now live and work in the UK, Ascension Island and the Falklands, since full citizenship rights were restored a couple of years ago. Even the tiny prison is costing more. The demon drink has played its part and the island recently experienced its first murder in 20 years.

Given considerable overspending last year, Clemett is on a mission to introduce better financial controls, with heads of departments now required to produce monthly financial reports. Clemett has seven accounts staff working for her and, under her supervision, they are trying to make procedures more efficient. All the staff are from the island. But despite introducing ACTT training to develop the local skills base, there is one vacant post for a financial analyst that Clemett admits she is struggling to fill.

Clemett arrived on St Helena at a point of major change. At long last, it looks like the island will get a much-needed airport – an announcement is due in the next few months. But despite the promise of improved access, the development is being treated with suspicion by many locals concerned about the impact on the island’s natural environment.

Originally the government was looking for a private sector partner to build the airport and develop up market tourist facilities including a hotel, spa and golf resort. There were also plans to build a number of luxury houses (starting price £500,000).

Shelco, a consortium of businesses including Grosvenor Estates, Ove Arup and India’s Oberoi hotel chain, expressed an interest. At first the government made encouraging noises, but then got cold feet as Shelco wanted first refusal on a number of development opportunities that would have given it a strong grip on the island’s tourism. The issue remains unresolved.

At the same time, the government is trying to introduce constitutional change that will effectively devolve day-to-day responsibility for the island’s affairs to elected ministers. At the moment Linda Clemett answers directly to the governor, who is responsible for finance, but if the changes go ahead, she will become responsible to a locally elected finance minister. The proposed structure would make it less easy for Saints to blame the expat bureaucrats for everything they don’t like.

It’s a change that is long overdue. Today a visit to St Helena is like stepping onto the set of a Gilbert & Sullivan operetta – it has a huge administrative structure bearing down on a tiny population. Virtually everyone – expats and locals – has grand titles and a burgeoning bureaucracy has grown unchecked. Consultants come and go – often with little result.

But it is vital that new life is breathed into this beautiful and intriguing island. St Helena is tropical, lush and boasts an abundance of beautiful scenery and stunning wildlife.

But fishing and snorkelling opportunities aside, it’s not been easy finding people to take on financial roles on the island. Alan Savery, a veteran of the UK banking and finance sector, and the man last year charged with establishing commercial banking facilities on St Helena, at the time admitted the expat life only appeals to a specific type of person.

‘It has to be somebody who is looking for a change and a challenge and who is willing to go out there for considerably less than the going commercial rate,’ he told Accountancy Age last year.

But Linda Clemett, for one, has no regrets. The position of financial secretary of St Helena is unique and whatever problems she may face – be they a dearth of cultural activities and a very limited choice of food and clothing – she will never forget this posting. And if the airport takes off and the world starts flocking in, her job may get a whole lot bigger.

FOREIGN OFFICE Adrian Colman, group finance director of Numerica, is no stranger to the joys of an expat experience either. Earlier in his career he spent more than two years in Bangkok working for PricewaterhouseCoopers’ assurance and advisory business doing corporate finance and business advisory work. ‘I’d met some interesting people who’d worked abroad, and wanted to see for myself what it was like,’ he says.

Colman is adamant that his time abroad has helped his career – ‘although in the short term working abroad is probably detrimental,’ he warns. ‘ When you go on secondment to anywhere that’s not London or New York, there is a tendency for it to be seen by others as a bit of a holiday posting.

‘When you get back, people don’t necessarily realise that your career has moved on and that you’ve gained all sorts of new experience,’ Colman says.

Colman’s posting was certainly no holiday. ‘When I arrived it was just after the Asian economic crisis, and there was a lot of interesting work on offer. Because the set-up isn’t as structured as the Big Four firms in the UK, and because you stand out as an expat, you get exposure to a huge range of opportunities and you can get added responsibility thrown at you. I got some great management experience that I wouldn’t have got if I’d have stayed at home.’

One of the hardest things about the experience, Colman admits, is coming home. ‘It’s the biggest culture shock. When you leave you believe the UK way of doing things is the right way, but working abroad opens your eyes to new and sometimes better ways of working. When you come back it can be hard to adjust – it took us at least a year to feel as if we were in the right place.’

Attitudes are definitely changing as overseas placements rise in popularity, and employers increasingly view a stint abroad as a tick in the box. Colman would definitely favour candidates who’d bitten the bullet and worked abroad. ‘It gives them an additional dynamic.’

Colman says anyone tempted to work abroad should do it. ‘There will be ups and downs but overall it’s beneficial. It pays to think what you want to get out of it before you go – for example there’s a huge difference between the experience you’ll get in the US and Australia compared to Asia.’

‘The other downside is that it gives you permanently itchy feet. If the right opportunity came up, I’d do it again.’